[金融学原理英文版.doc

CH7 1 A Current ratio=3.8 times DSO=41.1 days Inventory turnover ratio=5.5 times Fixed assets turnover ratio=4times Debt ratio=48.1% Net profit margin on sales=4.1% ROA=7.7% Note that we didn’t use average amount for stock variables B Bad profitability: low ROA Total asset turnover is poor.(1.86 times, while industry average=9.9/4.6=2.15 times) Low inventory turnover ratio High DSO C Every ratio we calculated except Fixed asset turnover was worse in 2007. 2 A Current ratio: 1.98 times DSO: 75.24 days Inventory turnover ratio: 5.6times Total assets turnover 1.7times Net profit margin: 1.7% ROA= 2.88% ROE 7.56% Debt ratio 61.9% B 1.7%*1.7=2.89% 1.2%*3=3.6% C Terrible DSO Net profit margin is good Poor ROA and ROE poor total assets turnover ratio D Unusual growth rate in 2007 will cause the financial ratios we calculated to be misleading. Because we didn’t use average amount for stock variables. 3 Total liabilities and equity=300000 Debt=0.5*300000=150000 Sales=450000 Receivables=45000 Cost of goods sold=337500 Inventories=67500 Payables=90000 Cash=27000 Fixed assets= 160500 Common stock52500 4 A Current ratio =2.73 times Debt ratio= 30% TIE= 11 times Inventory turnover= 4.15 DSO= 29.89 days Fixed assets turnover= 5.41 times Total assets turnover= 1.77 times Profit margin on sales= 3.40% ROA= 6% ROE= 8.57% B 6% = 3.4% * 1.77 9% = 3% * 3 C The balance sheet is where the problem is. D Very low inventory turnover probably means an excess inventory stock. E Some ratios will be distorted. Use average to avoid the distortion. 5 A Quick ratio =0.85 times Current ratio=2.33 times Inventory turnover ratio=4 times DSO= 37days Fixed assets turnover 10 times Total assets turnover= 2.37 ROA= 5.9% ROE=13.07% Debt ratio=54.8% Net profit margin on sales=2.5% P/E=5 times All of its ratios are worse than the industry averages B Current ratio decreases Inventory turnover increases Total assets turnover increases ROA ROE increase If dividend doesn’t increase or increases by a